A person has an eye test at Moorfields Eye Hospital, London, which has already set up a hospital in Dubai. Photograph: Martin Godwin for the Guardian

This morning's news that the government is setting up a body to assist the NHS in attracting contracts overseas has met with kneejerk opposition from those suspicious of anything that connects the NHS with the words "brand", "compete" and "contract". I don't blame them, but as scientists and doctors sometimes need to say to polemicists: it's a bit more complicated than that.

For the "NHS abroad" brand to benefit patients in this country, the key question is, could the NHS generate enough profit to offset the set-up costs and the loss of NHS trained doctors and nurses going to work abroad? Chris Canning, a director of Moorfields Eye Hospital Dubai, has an answer to that question, but it's the wrong one. He said the new agency had been set up without any cost or risk to the NHS: "We've put in our own money, the profits from our private wing – not a penny of taxpayers' money." Hang on, Chris, weren't those the very same profits that were supposed to be "all reinvested in NHS care" to justify the resources being put into the private wing?

The biggest scandal is that the NHS may start setting up for-profit clinics in developing countries such as India, having denuded those countries of their precious medical and nursing staff by dint of successive governments failing to train enough of our own staff.

At any rate, the real debate at this stage shouldn't be about NHS beds in India or Saudi Arabia, but about beds in the UK. The real scandal in our health service is the farce of "NHS pay beds", where beds in NHS hospitals are reserved not for patients with the biggest tumours but for those with the fattest wallets, not for those with acute infections but for those with solid insurance. This has been going on for decade despite obvious problems.

The ethical dilemma of turning away urgent patients from an NHS hospital site that has empty beds reserved for less sick but more wealthy people is such that I don't believe it is morally acceptable to have pay-beds on the same site as emergency admissions.

The case against pay beds in the NHS is even stronger when we see that the last government forced NHS hospitals to buy extra capacity for its patients at inflated prices from private hospitals and independent sector treatment centres, even though they had that capacity in their own hospital. Why couldn't they use it? Because it was reserved for private patients treated at lower prices than Bupa et al could offer.

Despite amendments to the competition part of the coalition's Health and Social Care Act, I fear it will ultimately be at the mercy of UK and European competition law. This is because successive governments have encouraged the NHS to compete for private patients. It is obvious to even the thickest law undergraduate that a competition judge is more likely to insist on granting private providers access to the "NHS market" (as designed and described by Thatcher, Blair, Brown and Cameron) when the NHS, with all its massive economies of scale, is strong-arming its way into the private patient market. The idea of an NHS hospital setting up a clinic or any other activity abroad is less problematic than private beds at home because these problems do not apply.

But a major problem with NHS pay beds is the obvious opportunity cost, because those resources could be used to treat NHS patients who are more urgent. The original reason why pay beds were allowed in NHS hospitals was to keep consultants in the same building as their NHS patients. This was in the days before job contracts and indeed the loyalty that almost all senior doctors working in the NHS now display. Private wards and wings are defended by each and every health secretary on the basis that "all profits are reinvested in NHS care". But while Canning suggests this is not at all the case, successive health secretaries have failed to show what those profits were. If they did exist, it was unclear whether they were large enough to compensate for the opportunity cost of not treating NHS patients in order of priority. I could find no general teaching hospital with published figures showing that NHS patients benefitted from pay beds.